The Audit Procedures for the Subsequent Events Review Can Be

question 154

Multiple Choice

The audit procedures for the subsequent events review can be divided into two categories: (1) procedures normally integrated as a part of the verification of year-end account balances, and
(2) those performed specifically for the purpose of discovering subsequent events. Which of the following procedures is in the second category?

• A) Correspond with attorneys.
• B) Test the collectability of accounts receivable by reviewing subsequent period cash receipts.
• C) Subsequent period sales and purchase transactions are examined to determine whether the cutoff is accurate.
• D) Compare the subsequent-period purchase price of inventory with the recorded cost as a test of lower of cost or market valuation.

---

Definitions:

Emergency Surgery

A medical procedure that is performed immediately to save life, prevent permanent harm, or alleviate severe pain.

Flexible Manufacturing System

An arrangement of machines interconnected by a transport system, designed to adapt to changes in the product being produced.

Prime Costs

The total of direct materials and direct labor costs associated with the production of goods.

Specialized Electronic Parts

Electronic components designed for specific applications or uses, often critical for the performance of specialized equipment.